Nifty may gain 5% in next few days: Barclays

Dhiren Sarin, Technical Analyst, Barclays is bullish on Nifty and sees it gaining 5 percent in next few days. "We can be modestly bullish but we can't be aggressively bullish until that 6400 area gives way," he told CNBC-TV18.

He explained that Indian stocks have recovered on the back of global sentiment and optimism. The S&P is making all-time highs and Sarin expects it to gain another 4-5 percent by the end of 2013 with a target at 1700. All of this is reflected in emerging market (EMs) indices.

Sarin further said that in his view the trading range for rupee would be at 58-60 per dollar. He also advises buying gold for short term.

Also read: Mkt correction likely as Q1 nos start to disappoint: IL&FS

Below is the verbatim transcript of his interview to CNBC-TV18

Q: What have you made of the Nifty move over the last few weeks - it has been a very narrow move but it is moving up nevertheless?

A: For the Nifty and Sensex, Indian stocks have recovered somewhat and this is on the back of global sentiment and optimism that has come back into the markets. This is also the case for broader emerging markets (EM) indices for Thailand stock exchange, for Malaysia so this is not just an effect of the Nifty itself, it is global markets.

If one looks at the west, the S&P is making all-time highs, the Dow transports and the list goes on so it is not surprising to see Nifty pretty buoyant at this point. We think it can head higher another couple of percent.

The big levels that come in are around 6360-6400 area for the Nifty. These were the peaks in 2008, 2010-2011 and we have not been able to overcome this on several attempts. We can be modestly bullish but we can't be aggressively bullish until that 6400 area gives way.

Q: Even at this point though you would put a long trade on the Nifty. You think essentially the trend is up?

A: Yes, indeed I would. If 5910 or so would be the support zone. If the Nifty starts to drop back below there then we would take profits on our bullish position. We have been recommending bullish positions since 5500-5600 area so we are quite happy to see this move.

Now what we would do is tighten our stops and look at about 5900 on the downside. As long as we stay above there the market can continue to chop higher.

Q: There has been some heartburn over how the banking space has suffered within this market any targets on the Bank Nifty and whether that as well is set for a recovery?

A: We think that the Bank Nifty will move in line with the broader Nifty. In fact, the Bank Nifty can start to outperform a little bit. Again this sentiment comes from abroad, the US is starting to outperform the banking sector and especially leading the way higher.

With these markets posting all time highs the higher beta indices like the banks, technology might start to do better. We are keeping an eye on that, but for India specifically it should be quite in line the Nifty and Nifty banks both going up a couple of percent together.

Q: Any thoughts on the rupee-dollar?

A: It is quite range bound at this point, not too aggressive. We think that it probably trades sideways. The range is 58.95 to about 60. Within that range we would look to sell rallies, very modest bias here though.

If we start to pop up above 60-60.10 then the INR starts to become a worse situation. We are patient and do think the medium to long-term trend is still higher for dollar INR. Even when dollar-rupee is 55, you are calling 62-63 and we still think that is the case. However, at this point over the week or so we prefer to be patient and just watch price action quite closely between the levels that we have just mentioned.

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RBI gold import curbs slightly positive to ind: BNP Paribas

Jul 23, 2013, 12.27 PM IST

According to the latest RBI guidelines, banks and nominated agencies should retain 20 percent of every lot of gold import in customs bonded warehouses and more gold can be imported only if they export 75 percent of the stored gold.

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RBI gold import curbs slightly positive to ind: BNP Paribas

According to the latest RBI guidelines, banks and nominated agencies should retain 20 percent of every lot of gold import in customs bonded warehouses and more gold can be imported only if they export 75 percent of the stored gold.

Like this story, share it with millions of investors on M3

RBI gold import curbs slightly positive to ind: BNP Paribas

According to the latest RBI guidelines, banks and nominated agencies should retain 20 percent of every lot of gold import in customs bonded warehouses and more gold can be imported only if they export 75 percent of the stored gold.

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Moneycontrol Bureau

BNP Paribas says the latest curbs on gold imports imposed by the Reserve Bank of India could be marginally positive for the  jewellery industry.

Late on Monday, the country's central bank put further curbs on gold import mandating that banks and nominated agencies should retain 20 percent (or one fifth) of every lot of gold imports in the customs bonded warehouses. They will be able to import further gold only if they export 75 percent of that stored gold.

BNP Paribas analysts Vijay Chugh and Tapan Joshi say this policy is just one step short of imposing quantitative and value restrictions on gold imports, but should help boost exports.

"In our opinion, gold importers could incentivise gold exports by raising premiums on gold purchases for domestic consumption. Considering that the Rupee has also weakened considerably, we believe gold exports should certainly appear much more attractive," they said on Tuesday.

Gold exports as a percentage of gold imports have declined to an estimated 12 percent currently from 41 percent in FY2009. The new norms will help stem this declining trend in gold exports seen in recent years, the analysts said.

However, gold exports are estimated to be just 10-15 percent of imports and thus will need to go up significantly, they added.

Also Read: PC Jeweller will prosper under new RBI regime, says CFO

In June, RBI had banned banks from importing on consignment basis for domestic consumption. It had also mandated that nominated banks and other agencies could import gold only on 100 percent cash basis, unlike using letter of credit (LC) benefits. This has now been withdrawn with the new norms in place and this Chugh and Joshi say is a welcome move as it should "alleviate working capital concerns."

BNP Paribas has maintained its "buy" rating on Titan Industries with a target price of Rs 337, saying these regulatory change raise the entry barrier to the industry and should therefore be favourable to stronger players.

Most jewellery stocks declined 2-6 percent in morning trade, but recovered later. Around noon, Titan Industries was up 4.6 percent at 271.70, Tribhovandas Bhimji Zaveri gained 7.3 percent to 213.40, PC Jeweller rose 15.4 percent to 85.80, Tara Jewels was up 6.5 percent to 128.05 and Shree Ganesh jewellery House was up 10.3 percent to Rs 73.85.

Tags: BNP Paribas, gold imports, curbs, Reserve Bank of India, export, customs bonded warehouse, bullion, restriction, Titan Industries, PC jeweller, Tara Jewels, Shree Ganesh Jewellery House, Tribhovandas Bhimji Zaveri

From DJ EU Officials Spain Aid Cap Of 100 Bn Euros 'should Be Enough'

The latest earning numbers FIRST on CNBC-TV18

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SREI Infrastructure Finance AGM on August 14, 2013

Jul 23, 2013, 12.27 PM IST

The 28th Annual General Meeting (AGM) of SREI Infrastructure Finance will be held on August 14, 2013.

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Rs 1100 crore debt for new expansion project: JK Paper

Jul 22, 2013, 11.59 AM IST

In an interview to CNBC-TV18, AS Mehta, President, JK Paper spoke about their results and expansion plans.

In an interview to CNBC-TV18, AS Mehta, President, JK Paper spoke about their results and expansion plans.

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Coromandel Engineering: Outcome of board meeting

Coromandel Engineering Company Ltd has informed BSE that the Board of Directors of the Company at its meeting held on July 20, 2013, have approved the issue and allotment of Redeemable Preference Shares on private placement basis subject to the approval of shareholders of the Company.The Board of Directors have convened an Extra Ordinary General Meeting on August 14, 2013 at 10.30 A.M. at Rectangular Hall, Dare House, No.2 N.S.C Bose Road, Parrys, Chennai - 600001.Source : BSE

Read all announcements in Coromandel Engg

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Buy private sector banks on decline: Dipen Sheth

Dipen Sheth, Head-Institutional Research at HDFC Securities told CNBC-TV18, "The temptation is to pounce on the public sector undertakings (PSU) banks. We like them when they were 1 time book or adjusted book, we like them more when they were 0.9x or 0.85x and now things like Oriental Bank fell to 0.5x adjusted book. This could be illusory, I am not specifically talking of Oriental Bank, but what can happen is that as the economic cycle toughens in India over the next one or two years, I suspect it will, we are in a different growth trajectory now."

"Some additional non-performing assets (NPA) accretions could happen to adjusted book value, which might make the current price by adjusted book values revise significantly upwards and the same price levels for the banks. So, I would still say that private bank should be bought on decline. There are some very capable names there. Not all PSU banks are relatively incapable, nor are all private banks relatively capable. But with some intelligent stock picking, the leaning should be still towards private banks, he added.

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Kalindee Rail: Open offer for 49.52 lakh shares by Texmaco Rail

ICICI Securities Ltd ("Manager to the Open Offer") has submitted to BSE a Copy of Public Announcement ("PA") regarding Open Offer ("Offer") for acquisition of up to 49,52,280 (forty nine lakh, fifty two thousand, two hundred and eighty) fully paid-up equity shares of face value of Rs. 10 (Rupees Ten) each ("Equity Shares") from the public shareholders of Kalindee Rail Nirman (Engineers) Ltd ("Target Company") by Texmaco Rail & Engineering Limited ("Acquirer"), pursuant to and in compliance with, among others, Regulations 3(1), 4 and 20 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended (the "SEBI (SAST) Regulations, 2011").Price / consideration: The Offer Price of Rs. 68 (Rupees Sixty Eight) payable per Equity Share is calculated in accordance with Regulation 8(2) of the SEBI (SAST) Regulations, 2011 ("Offer Price").Type of offer: The Offer is being made by the Acquirer pursuant to and in compliance with Regulations 3(1) and 4 of the SEBI (SAST) Regulations, 2011 and is also a competing offer under Regulation 20 of the SEBI (SAST) Regulations, 2011.Source : BSE

Read all announcements in Kalindee Rail

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What Food Security Bill means for India's subsidy burden

By Dhanraj Bhagat

The National Food Security Bill 2013 was recently passed as an ordinance by the Union Cabinet. The bill aims to provide 5 Kg of food grains per person per month at subsidised prices from State Governments under the targeted public distribution system.

The eligible households will be entitled to food grains at a subsidised price not exceeding Rs 3 per Kg for rice; Rs 2 per Kg for wheat and Re 1 per Kg for coarse grain.

Implications:

Welfare economics:

A huge percentage of the Indian population lives below the poverty line where getting one square meal a day is a challenge. The food security bill aims to satisfy this basic want and in that sense although it encourages welfare economics, the intention is noble. This is what would need to be weighed against other economic considerations.

Rising Subsidy burden:

To gain a perspective on the subsidy portion let us look at the per kg price. Government procurement price would be approximately Rs. 13.45 per Kg for rice and Rs. 12.85 per Kg for wheat. The subsidy portion works out to Rs. 10.45 per kg of rice and Rs. 10.85 per kg of wheat. When we take into account the total number of beneficiaries and the quantity of food grains that would be distributed, the burden on the exchequer is projected at a whopping Rs. 1.3 lakhs crores per year. The increase in subsidy burden will only add to the current fiscal account deficit woes.

Inflationary pressures:

Procurement by the government of such huge quantities of rice, wheat, and other grains would result in less quantity available in the open market, thereby pushing up food prices. This would be further aggravated in a year of low production which would necessitate procurement through imports, which in turn will again push prices up.

Public distribution system and leakages:

The current system of distribution is though the approximately 5 lakh fair price shops spread across the country. In addition there are logistics issue of picking up the food from the source, storage and onward transportation. Leakages on account of pilferage, rotting of grains and logistics inefficiencies account for nearly 40% to 50% of the total food stock. Should this trend continue, the incremental losses on account of additional procurement under the Bill is something we as a nation can ill afford.

Agriculture opportunity:

With additional demand the agriculture sector would receive a boost and this could lead to more investments in improving agriculture productivity and making it more competitive.

Infrastructure opportunity:

To overcome the inefficiencies in the distribution of grains, substantial investment would be required in creating infrastructure like warehousing and storage facilities, roads, improving rail connectivity etc. This could create a huge opportunity for the private sector which could turn out to be one of the catalysts for a renewed economy.

(The writer is Partner, Transaction Advisory Services, Grant Thornton India LLP)

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Stock market prediction for July 22-26: Astrostocktips

Technology sector will continue getting strong astrological support. Buy HCL Technologies, TCS, Tech Mahindra, Think soft, KPIT, eclerx, Infosys etc on dips, says Satish Gupta of astrostocktips.in.

By Satish Gupta of astrostocktips.in

Weekly planetary position: During the week, Moon will be transiting in Sagittarius, Capricorn & Acquires. Lord Saturn & Rahu in Libra. Sun in Cancer. Mercury, Jupiter & Mars in Gemini, Venus in Leo. Ketu in Aries. Pluto in Sagittarius. Neptune in Aquarius & Uranus in Pisces.

As predicted, last week volatility & deception was it at its highest level. Although, planet mercury's retrogration period is over but deception & volatility will continue next week also, so be very cautious in carrying over night positions in Nifty.

Following sectors will be getting astrological support:

Technology sector will continue getting strong astrological support. Buy HCL Technologies , TCS , Tech Mahindra , Thinksoft , KPIT , eClerx , Infosys etc on dips.

Leather sector will continue receiving astrological support. Buy Bata , Relaxo , Sree Leather etc on dips.

Pharma sector will also continue receiving strong astrological support. Buy Lupin , Dr Reddys , Biocon , Divis Lab , Strides Arcolab , Cipla , Sun Pharma etc on dips.

Telecom sector too will be getting astrological support. Buy Idea , Bharti , Tata Communications on decline

Paints sector will be receiving strong astrological support. Buy Asian Paints , Berger Paint , Shalimar Paint , Kansai Nerolac , Akzo Nobel etc on decline.

Liquor sector will continue getting strong astrological support. Accumulate McDowell on every decline.

Always be very cautious, when some main planets i.e. Rahu, Ketu, Jupiter & Lord Saturn are changing their houses. It may be that certain sectors which were continue sly getting support for long time may stop receiving support due to change in position by above planets & stocks of those sectors starts coming down, resulting in losses. This is common reason, why most people loss money.

One should trade only in the stocks of that sectors which are getting very strong astrologically support.

Sectors which get very strong astrological support are not normally affected by downfall in the market.

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Indian ADRs: ICICI Bank slips 1.5%, Tata Motors gains 1.7%

Indian ADRs closed mixed on Friday. Among banks, ICICI Bank slipped 1.49 percent to end at USD 35.77 per ADR and HDFC Bank lost 0.18 percent to USD 37.81.

Sterlite Industries dropped 2.74 percent to USD 5.69 while
Tata Motors gained 1.68 percent at USD 24.81.

In the technology space, Wipro declined 0.25 percent to USD 8.04 and
Infosys rose 0.29 percent to USD 47.74.

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